Articles tagged 'NP Portfolio'
Admittedly a very small holding (acquired via our investment in CohesiveFT) and with some mixed feelings (more on that below) but nonetheless an excellent result for an exciting and important technology and the team behind it led by the one and only Alexis Richardson…yes today SpringSource (VMWare) announced its acquisition of Rabbit Technologies – the company behind the world’s leading implementation of AMQP, RabbitMQ.
RabbitMQ was born of a JV between CohesiveFT (my partner Amy sits on their Board) and L-Shift and was spun out as an independent entity under Alexis’ leadership about a year ago. The mixed feelings I alluded to above are only because we were quite excited by the prospect of helping Rabbit grow as a standalone business, given their already excellent market share, the existing and extremely fast growing market for their product (messaging), the already strong brand and market adoption of RabbitMQ and a number of successful open-source business model pioneers and exits to emulate. As we did not have the capital required to make this happen we could not put a credible alternative on the table. To be fair, there were always a lot of moving parts and there is no guarantee that we could have put a better, workable deal forward and clearly joining the VMWare family is an awesome opportunity for the company and the team.
In any event, I’m really excited and happy for them and proud to be associated with them, even if only in a small way. Here’s to hoping this is a homerun deal for VMWare! (And yes having “Rabbit” in your name is one of our investment criterea…) 
As some of you may know, I am very interested in how the advent of mobile computing (or as Gilder would say – teleputers) and in particular believe that the iPhone is the first device to really take us past the inflection point and has started to give us a good sense of what the future will look like.
Financial services and mobile computing are a match made in heaven, and the only thing that is surprising about the flurry of activity in this sector over the past 12-24 months is that it took so long. The fact that some of the earliest and most ambitious ventures in this area emerged in developing countries speaks volumes to the fundamental inertia and resistance to change and innovation in large corporations (in particular financial services firms and US/European telecom operators in this case.) People may laugh at the hysterical self-immolating attitude of the traditional media and entertainment industry, but well…you know – ‘glass houses’ and all that…
But things are starting to move. I wrote about BoA’s iPhone offering 18 months ago – the first banking app – and was impressed this week when I saw Nokia invest $70 million in Obopay. (Although I have to admit feeling a tinge of regret, as Obopay has been on our investment radar screen about a year or so now, but we just didn’t yet have the capital to pursue this (and other promising deals.) Like in most walks of life, many potential investors prefer the psychological safety of buying a big brand – whether directly (think of the billions pissed away buying banking stakes waaay too soon) or with the giant private equity or hedge fund groups; as the saying goes, “no one ever got fired for buying IBM’) Anyhow, I’m pleased to announce that one of the companies we have invested in, GnuTrade, has recently announced the first financial gaming app for the iPhone:
The innovative web app, which is featured on the Apple website, gives iPhone users an instant view of how financial markets are performing, and lets them place simple bets on whether prices will rise or fall. The app complements gnuTrade’s acclaimed web-based trading platform (www.gnuTrade.com), using its signature graphics to show live market price action, but via a handy touch-screen device.
Why are we excited about this? Well it brings together three big things: increased consumer interest and awareness of financial markets, mobile computing and mobile/p2p gaming. And all of this in a simple-to-understand, easy-to-use, oh-so-not-wall-street/city kind of way. GnuTrade is definitely not your father’s Oldsmobile so to speak. It’s social. It’s fun. It’s about not looking down your nose at people who are interested but are intimidated by traditional banks and brokers and spread ‘trading’ firms. It’s about prizes and play money or real money (only if you live where this is allowed of course.) GnuTrade is a digitally native markets company: they were early on Facebook (become a fan here), they are the UK’s most prolific twitterer (62,000 updates! follow them @gnutrade), and they have a pretty neat set of widgets if you are interested in adding some markets info to your blog or website – basically they ‘get it.’
Now the iPhone app is definitely not perfect. First of all it is a web app (runs in Safari) as Apple does not (yet?) allow ‘betting’ applications in the AppStore (to get the app for free on your iPhone, simply enter http://iphone.gnutrade.com on your iPhone’s Safari browser, and add the app to your homescreen.) Secondly, it’s beta so it has bugs (feedback and constructive criticism welcomed – send to @gnutrade for example) and thirdly – unless you have a blisteringly fast 3G connection – I would stick to wifi only for now.
They also have a very cool and fun beta application called NewsPools (similar to HubDub for example) that I for one would love to see on the iPhone (are you listening Lieven? )
And while you are at it, let’s see a market on when (what year say) the US will wake up and legalize, regulate and tax online gambling!
The deadline (midnight, 6th April) for applying to Mini Seedcamp London is rushing up quickly (where does time go?) and for any budding entrepreneurs out there with a company up their sleeve or in their garage, I can think of no better place to start ‘growing innovation’ than in the seedcamp community.
Mini Seedcamp London aims to connect the UK and Ireland’s thriving startup community, but the buck doesn’t stop there. If you are a startup team that is ready to wow us and you hail from anywhere in the EMEA, don’t hesitate to apply.
Mini Seedcamp London will be bringing together 20 of the best seed stage web tech startups with experienced entrepreneurs, investors, and developers from the UK and all over Europe to participate in a day of intense mentoring, panel discussions and presentations at NESTA’s HQ in central London.
London is increasingly becoming the hub of the European entrepreneurial ecosystem, with a high concentration of investors, startups and talent and we’re exciting to see what teams and ideas emerge on 20th April!
Of course as founding investors in seedcamp we have a particular interest to encourage the best and brightest and most energetic entrepreneurs and engineers to join the community but I think you’ll find that it is worth it. We’d especially like to see more companies focused on disrupting financial services and markets. Media and consumer internet are fascinating sectors but there is more to life and if an industry ever screamed out to be disrupted, it’s finance in 2009…So what are you waiting for? Apply now!
Over 30 years ago, an ambitious and smart young man decided there was a fantastic market opportunity to provide convenient, (relatively) better value physical foreign exchange services to travelers. Bretton Woods had recently collapsed ushering in floating exchange rates and the age of global trans-continental travel was gaining momentum. Leaving a fledgling career in investment banking at the age of 24 to become an entrepreneur, Lloyd Dorfman opened his first Bureau de Change in Holborn and founded Travelex in 1976. In 2005, Apax Partners bought 63% valuing the firm at almost £1.7 billion. Since then they have continued to prosper and grow, buying Ruesch in 2007 and expanding their presence in the corporate FX services market. In their last published accounts (for 2007), Travelex posted an EBITDA of £107 million on revenues of £540 million. It’s a great story and I’m sure a case study on successful entrepreneurship in business schools around the world.
Despite their success – indeed inspired by their success – we think there is an exceptional opportunity to build a new breed of FX broker – a business that from it’s inception is built upon a foundation of 21st century technology. A business that not only embraces transparency but is predicated upon it. A business that leverages the cost advantages afforded by having a modern web-based infrastructure to profitably offer better value – both prices and service – to its customers. A business that recognizes the underlying similarity of retail and institutional business but is cognizant of the subtle but important differences in what these customers need. And that is why we are so pleased to be founding investors in FX Capital Group who we believe will bring a fresh approach to an enormous and growing market in foreign exchange payments. FX 2.0 if you like.
Using the same infrastructural backbone, FXCG will offer foreign exchange and international payments via two complimentary channels: FX Capital Group for corporates, trust and equity brokers and RabbitFX for individuals. They launched privately last fall and are now in public beta, trading by phone and email with most of the account opening process automated. Later this year, they will be rolling out a fully automated (account opening, trading) web-based platform supported by an expert and experienced sales/account management team. From the start, they offer a couple of compelling advantages:
- Excellent and – importantly – fully transparent pricing; typically their prices are up to 4% better than high street banks and up to 2% better than specialist FX brokers. When you trade, you see exactly where they have traded on the wholesale market and a detailed breakdown of the markup. And if you are a potential customer that wants to ‘kick the tires’ and see just how much you would have saved on your past FX purchases by trading with FXCG, if you know the rate, the date and better yet the approximate time you dealt in the past, FXCG will give you an audit report highlighting the difference between the price you traded at and what you would have got with them.
- They offer 40 currency pairs, more than any other broker, meaning for the vast majority of customers that you can do all your business in one place.
- Minimum trading size of just £100, facilitating trading for almost any need, without discriminating against modest size transactions.
As if this wasn’t enough, the company has a number of other exciting product and service offerings in the pipeline already and indeed the capital they have raised will allow them to accelerate their build out having refined and developed the business plan over the past 18 months. Of course, the traditional point of view might ask why not wait a few months until all the main platforms and services are ready to go live, but we support the founders in the belief that the best way to build a business that is relevant to your customers is to start doing business and build-in strong feedback loops with your early adopters to help guide development and investment priorities. Indeed this is par for the course for many technology startups, and is an approach we used to great effect (despite a lot of initial resistance) in Digital Markets at DrKW, where as it happens Nigel Verdon – the founder and CEO of FX Capital Group – worked with me as COO of that business.
Not only do we think the business opportunity is vast, and have first hand experience of the founders’ ability to deliver, we are also a customer. We are in the process of opening up our corporate account and personally I have been a guinea pig for Nigel and his team for over a year now. Previously I did my FX business with my bank and then exasperated by the ridiculous mark-ups and complete lack of commercial sense, I moved my business to HIFX. While the pricing was better (in a one-eyed-man-is-king kind of way), and the service was friendly and competent, it was still a pain in the ass to trade with them. Obviously, although admittedly I’ve almost certainly benefited from an enhanced personal touch from RabbitFX as an alpha customer, the experience has been excellent and refreshing. Let’s just say I no longer cringe when I need to make an FX payment. And it will only get easier. I can highly recommend them – if you are the early adopter type sign up now. If you like to wait for the initial bugs to get worked out of the OS, sign-up later this year when they launch their fully automated platform.
We talk a lot about the new technology ecosystem that allows startups across a variety of industries to build and run their companies more cheaply and efficiently – cloud computing, SaaS, mash-ups, widgets, etc. And indeed it is fantastic and transformational. But typically (although not always) this focus tends to ignore the non-tech / non-UI/UX, mundane aspects of running a business: finance, accounting, and – especially for European companies – foreign exchange! With this in mind, I would encourage the young vibrant startups and companies to have a look at FX Capital Group for managing your foreign exchange payments – not only are they the best value, I think you’ll find a company with a similar ethos and culture, open to suggestions, admitting when they could do better and working hard to make you happy. Further for any businesses that have foreign exchange at the heart of their value chain – travel related businesses are an obvious example – think about offering your customers an integrated one-stop shop for their FX needs via a white label implementation of FXCG’s platform.
Travelex succeeded because it was innovative, opportunistic and agile and they competed against on the one hand large and lethargic banks and on the other hand a fragmented sea of small, local private operators. We think FX Capital Group can build on this example and drive the next phase of innovation and growth in this enormous and important market. Hat tip to Lloyd for the inspiration!
Today Zoopla.co.uk announced a further GBP3.75 million investment round in which we are very excited to be participating alongside Atlas Venture and Octopus Ventures. I will also be joining their advisory board. We were first introduced to the very talented founder and CEO, Alex Chesterman, by my friend Fred Destin almost a year ago after I had congratulated him on Atlas’ original investment in Zoopla and had expressed my admiration for Zoopla’s site and approach.
So what is Zoopla!? In their own words:
Zoopla.co.uk is a unique property website offering users information and tools to help them make better-informed property decisions. Our aim is to provide the most comprehensive source of residential property market information in the UK to help buyers, sellers, owners and estate agents alike and give them an advantage in the property market…
…We have started by providing FREE value estimates, sold prices and local information as well as letting users add content by editing information and uploading photos. We are the UK’s fastest growing property website and by far the largest and most active property community in the UK, with over a million user contributions to our website in 2008 alone…
…Our value estimates are calculated using a proprietary algorithm (a secret formula) that we have developed by analysing millions of data points relating to property sales and home characteristics throughout the UK. The algorithm works by comparing relationships between home prices, economic trends and property characteristics in given geographic areas. Our estimates are constantly refined, using the most recent data available and a variety of statistical methodologies, in order to provide the most current information on any home.
We are still testing and improving our features and tools and recognise that things aren’t perfect yet…
So what’s so interesting about Zoopla!? Or perhaps more specifically, how does Zoopla fit into Nauiokas Park’s investment universe? Two words: rich data.
- In Zoopla, Alex and Simon Kain (co-founder and CTO), have leveraged the web to feed intelligent algorithms that allow them to bootstrap basic, publicly available data, into an increasingly more robust, accurate, rich and granular dataset of UK residential property.
- They have built the site in a way that naturally compels visitors to improve and enrich the dataset. This user-generated data is not only very valuable but is itself subject to Metcalfe’s Law and so adds tremendously to the sustainable advantage of the site and their database. This is not trivial. When I was running a Credit Trading business, complex-data quality issues were absolutely critical to running the business efficiently and having effective risk management. We, like other banks, were plagued with bad quality (inconsistent, out-of-date, missing, etc. etc.) data. As a part of the ‘web-ification’ of our business (pre Digital Markets stuff), one of the single most effective things we did was to expose our various data structures to broad populations of users within the bank and allow users to correct and enhance the data on an ad hoc basis. Of course the ‘data priests’ were aghast…but it worked. Really I think it’s just applying a variation of Linus’ Law: “given enough eyeballs, all bugs are shallow.”
But how does a unique, rich, ever-improving, granular, transparent, database of UK property prices fit with Nauiokas Park’s focus on disruptive business models and technologies in financial services and markets? Well, we think Zoopla is ideally positioned to drive and benefit from a fundamental shift in the economic structure underlying the property markets. (This is a theme regular readers will recognise,) ie the shift from a market predicated on information scarcity to one build on information abundance. And you don’t even have to be particularly clever to work out how this is likely to play out, as property is the ith market in a series of [N] markets to have this thrust upon them. I don’t want to give too much away, but for the City types out there just think back to the bond markets of 1990. (For Wall Street types you only have to think back to oh about, 2004…) All other things being equal, as this “phase change” occurs in an industry, value moves away from transactions (matching) to data. (Think Merrill Lynch vs. Bloomberg LP over the past few years as a reasonable pair trade in this vein. Or all investment banks vs. Markit Group…)
Post-2008, even the proverbial man-in-the-street knows there was a data… how would you say… “issue”… when it came to the intersection of residential property and finance… Now I’m not suggesting (not quite anyways) that had Zoopla existed and been well-established globally years ago that the sub-crimeprime crisis would not have occurred (stupid is as stupid does)…but having easy access to the kind of readily “digestable” data available from Zoopla would clearly have been a boon to any responsible mortgage underwriter or securitization professional. In fact, I’d go so far as to say that today were I an institutional investor in UK RMBS, I would require that the underwriters/originators of the pools provide me with a FTP feed of the individual Zoopla data of every property in the pool. And if I were running say a big UK mortgage book and/or originator, I would certainly be interested in having an independent automated external mark-to-market run at least monthly, probably weekly…you get the idea.
And finally, whenever you have good, digital, reproduce-able data, well there my friend you have the makings of a myriad of listed and OTC markets in that underlying. Think Case-Shiller only better.
We are truly excited by the myriad of business opportunities available to Zoopla as it continues to grow and improve its core database and builds products and services on top, but perhaps most exciting is being able to participate once again at the early stages of a company that is set to play a key role in transforming an important and large marketplace, reducing friction and creating an entirely new value paradigm. Even reminds me a little of another UK start-up you might have heard of called Betfair… And we can’t wait to see what Alex and the team will achieve in the next few years and look forward to helping them in any way we can.
So, if you live in the UK, what are you waiting for? Go Zoopla! your home, claim it, enhance the data and presto, you now have effectively a pretty good proxy ticker-tape for (probably) the most important asset you own.
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